26 Jun 2017
How to Afford Private School Fees
Every parent wants the best for their kids, but not every parent feels they can afford private education. While a private education is the go-to option for the particularly affluent, most “everyday” couples feel that they can’t afford the investment.
If you’re determined to send your child to a private school, then it’s important to have the right financial strategies in place to make that happen. The estimated cost of a private education from prep to year 12 is almost $100,000, with the more exclusive schools costing more than double that.
But calculating the cost of education into your budget doesn’t stop there. You’ve also got to take into account uniforms, extracurricular activity, meals and more.
As home loan specialists, we help thousands of Australians with financial challenges, including budgeting and formulating strategies to afford private schooling. Here are the most recommended options that could be right for you:
Leverage your mortgage
If you have a mortgage, you can use a redraw facility or offset account to help with education expenses. Redraw facilities allow you to borrow money you’ve already repaid, while an offset account is a savings account linked to your home loan.
Before you go through with leveraging your mortgage, it’s important to set up a robust budget (and have an ironclad sense of discipline). If done correctly, leaning on your mortgage to pay for education is one of the smartest and most efficient ways you could go about it.
One of the chief advantages of leaning on your mortgage is that your expenses are coming from untaxed sources, while most other options carry tax implications. If a redraw or offset account sounds like the right option for you, contact us about getting set up. We can help you with everything from calculating your budget to getting started with the account.
Take out a personal loan
A more straightforward but still effective route could be a personal loan. A personal loan can be a very powerful way to afford a large investment while improving your credit rating and paying less interest than you would on credit.
Follow this link to learn more about the advantages of personal loans.
Mortgage House
At Mortgage House, we’re no strangers to financial challenges.
Whether you’re taking out a personal or home loan, consolidating debts or organising your budget, we can help.
If you’d like to know more about leveraging your mortgage or taking out a personal loan, you can contact us for advice about the best options for you. Private school fees can drastically affect your financial planning, so it pays to speak to the experts about it.